T
he past couple of years have been marked by significant market upheaval, making the phrase "Hey man, give me some credit!" more relevant than ever. As investors seek stable returns in a post-pandemic world, they're increasingly turning to credit positions within capital stacks as a safe haven for their dollars.

    Invesco Commercial Real Estate Finance Trust (INCREF) has been at the forefront of this trend since its launch in May 2023. By August 2024, the real estate investment trust had already surpassed $1.4 billion in originations across 22 deals, and today that total stands at $2.5 billion across 25 deals.

    The shift towards alternative lenders like Invesco is a significant trend that's unlikely to reverse anytime soon. Bert Crouch, head of North America at Invesco Real Estate (IVZ), attributes this change to the ongoing lending void left by banks' retrenchment and the increasing demand for high-quality assets with top sponsorship.

    Invesco's broader infrastructure plays a crucial role in its success, with $90 billion in assets under management. The firm invests across asset types, both domestically and overseas, bringing valuable data and intel to bear when carving out investment strategies during up and down markets.

    Crouch sat down with Commercial Observer in September to discuss the state of the market and why real estate credit remains a hot commodity. He highlighted the benefits of investing in real estate debt, including lower volatility compared to equity investments and the potential for elevated total returns.

    The current environment is characterized by high base rates and wide spreads, making it an attractive time for investors to enter the market. Crouch noted that banks are hesitant to add exposure to commercial real estate due to regulatory pressures and deposit costs, creating opportunities for alternative lenders like Invesco.

    Invesco's focus on credit has been a key differentiator in the market, with the firm leveraging its expertise to provide gap financing to developers in need of refinancing. The company's vertical integration strategy has also allowed it to access non-traditional property types and drive alpha through data-driven and tech-enabled platforms.

    Looking ahead, Crouch expressed optimism about the industry's prospects, citing the potential for a rate cut and pause by the Fed as a catalyst for growth. He also highlighted the increasing acceptance of non-bank lending and private credit origination, which has created new opportunities for investors to access real estate assets.

    However, Crouch also identified two potential headwinds: a surprise rate cut and an unexpected regulatory environment. Despite these risks, he remains bullish on the industry's prospects, citing the pent-up demand for real assets like real estate and the potential for scalable capital deployment in the upcoming environment.